@Agata Dominika sure not a problem. Remember I am new at this so I will start by saying it was not an awesome deal. However I have been listening to pod cast day in and day out and wanted to pull the trigger. Let me start by saying I learned more off this deal in the first 30 days then anything I learned in the months of all the books etc. lol.
I chose a condo due to the overall cost of getting ownership in something cheaper that I could get a primary loan from a bank on. They were asking 144900 for the property and I offered 139000 they countered at 140000. I accepted. After the inspection I was able to work out a credit of 750 at closing which brought me down close to my original asking price. When I originally looked at the property it was ready to close and set right up for a rental. The property owner was to stay for 3-6 months while their other place was getting ready and we had worked out a contract after closing they would sign. The day of closing the tenants were moved all out and I was left with no renters.
I bugeted 2k for repairers of little things like electrical plates, plugs, cleaning, water heater, etc. After I went into the place decided to remove all the floor and do a full gut on the place. It is going to cost me around 7K to gut and lay new floor, new cabinets, new kitchen, all new shut off valves. The biggest problem I ran into is I can't just go in and do this. I need to get approval from the HOA. little to my surprise I didn't think I needed to do that. Took me about 3 weeks to get everything worked up and submitted for approval and it came back approved. So I am currently replacing everything.
I expect I will have it on the market by end of october and rented by first of November. I chose a condo for a couple of reasons:
1. Cheaper Insurance as Insurance is included with the HOA fees
2. Cheaper then a home in Miami area
3. Only need to worry about interior of place not Roof, laden, etc
I purchased the property as a primary residence which I am not living in. I am currently house hacking the property as I will be renting for 1500 a month. I live in a travel trailer and have no real rent payment. I put 25% down on the property which I pulled out of my 401k to fund the downpayment. I still factored in regular expenses which look like this:
1500 month Rent for a 2/2 is very under priced in the location but want my choice of tenants
Monthy Expenses 1379.16
Vacancy- 5%
Repairs and Maintenance- 4%
Capital Expenditures- 4%
Property tax- 136.50
HOA- 377
Monthly Cash Flow is $120.84
5.78% pro CAP
44k cash needed up front
3.3 CoCROI
I know the numbers are not great but what I am planning to do is house hack to pay this property off in 1.5 years. Knowing that I have replaced the whole interior I expect very little if any repairs for the first year to 2 years. I should be at an 8% by this time next year. I will probably also do a refinance to get some equity out and drop payments to purchase a second property as an investment property.
One thing to remember is look into the HOA fully and make sure you understand the rules of renting out your condo. Some places won't let you rent till after you lived there for 1-2 years. I am able to rent as soon as I close. Also go meet with the HOA and have some open discussions with them before getting tied up with them.
Let me know if you have any other questions. You can send me a PM. Hope this helps.
